Q2 Earnings Outperformers: ESAB (NYSE:ESAB) And The Rest Of The Professional Tools and Equipment Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the professional tools and equipment stocks, including ESAB (NYSE:ESAB) and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 10 professional tools and equipment stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.

While some professional tools and equipment stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.1% since the latest earnings results.

ESAB (NYSE:ESAB)

Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE:ESAB) manufactures and sells welding and cutting equipment for numerous industries.

ESAB reported revenues of $715.6 million, up 1.2% year on year. This print exceeded analysts’ expectations by 6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.

ESAB pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 17.6% since reporting and currently trades at $108.82.

Is now the time to buy ESAB? Access our full analysis of the earnings results here, it’s free.

Best Q2: Lincoln Electric (NASDAQ:LECO)

Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.

Lincoln Electric reported revenues of $1.09 billion, up 6.6% year on year, outperforming analysts’ expectations by 5.1%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

The market seems content with the results as the stock is up 4.7% since reporting. It currently trades at $233.98.

Is now the time to buy Lincoln Electric? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Kennametal (NYSE:KMT)

Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors.

Kennametal reported revenues of $516.4 million, down 4.9% year on year, falling short of analysts’ expectations by 1.9%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.

Kennametal delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 17.5% since the results and currently trades at $20.73.

Read our full analysis of Kennametal’s results here.

Snap-on (NYSE:SNA)

Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Snap-on reported revenues of $1.28 billion, flat year on year. This result surpassed analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ organic revenue and adjusted operating income estimates.

The stock is up 6.5% since reporting and currently trades at $334.01.

Read our full, actionable report on Snap-on here, it’s free.

Middleby (NASDAQ:MIDD)

Holding a Guinness World Record for creating the world’s fastest conveyor pizza oven, Middleby (NYSE:MIDD) is a food service and equipment manufacturer.

Middleby reported revenues of $977.9 million, down 1.4% year on year. This number topped analysts’ expectations by 0.6%. However, it was a slower quarter as it recorded full-year EBITDA guidance missing analysts’ expectations significantly and EBITDA guidance for next quarter missing analysts’ expectations significantly.

The stock is down 7.5% since reporting and currently trades at $133.98.

Read our full, actionable report on Middleby here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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